Nevada's gold mining industry boomed when prices stayed above $400 an ounce most of this year.
As prices crossed the $500 line this month a level that has been little more than a dream since late 1987 spirits in the industry rose even higher.
But industry executives wonder how much of their increased revenue they'll be able to take to the bottom line.
The problem: Although the price of gold is up, so are the costs of many of the commodities that miners use to produce an ounce of the precious metal.
Although the cost of diesel fuel to run gigantic machinery in mines has backed down in recent weeks, its mid-year increase hit mine operators hard.
So did the rising cost of construction materials such as concrete and steel.
For Newmont Mining, the biggest gold producer in Nevada, that means that 2006 will be a year in which cost control and operating efficiency gets increased attention.
"We're really looking at opportunities to improve our margins," says Mary Korpi, an Elko-based spokeswoman for the company.
Some of those efforts will be multi-million dollar initiatives.
Newmont is preparing to spend some $435 million to build a 203-megawatt, coal-fired electric generating plant in Eureka County.
With electricity representing the company's second-biggest cost in Nevada only labor accounts for more Newmont figures it can cut its production costs by $20 an ounce when the plant comes on line in 2008.
That would be a 7 percent reduction in costs.
Barrick Gold, another major producer in the state, already has brought a 115-megawatt generating plant on line to give it more control over its power costs.
Even though operating costs continue to rise, mining companies continue to push onward with development of projects in Nevada.
"Five hundred dollar gold is a wonderful thing," says Russ Fields, president of the Nevada Mining Association.
The state Division of Minerals counts 153 mining projects under way in the state, and subcontractors ranging from drilling companies in Elko to assay labs in Reno are feeling the pressure.
"People are getting the work done, but they're very, very busy," says Alan Coyner, administrator of the division of minerals.
Consistency in metals pricing gold has risen 77 percent in a bull market that's run for five years provides the confidence the industry needs to undertake big projects.
Planning and permitting for a new mine can take five years after discovery, Fields says, and plans can be shelved unless prices remain consistently strong.
And it's not just gold and silver prices that are strong.Higher prices for metals ranging from copper to uranium to molybdenum have spurred the search for new deposits and the expansion of existing projects.
The Robinson Mine, a major copper producer near Ely, continues to boost its production, and its employment stands at 460 as the year comes to an end.
"I hope that continues to grow and expand out there," says Fields."Those folks in White Pine County could use some strong economic activity."
Other companies are stepping up the exploration for copper north of Ely and in the historic copper regions around Yerington.
Golden Phoenix Minerals of Sparks, meanwhile, is nearing completion of the mill and other facilities it needs to begin mining molybdenum at Denio along the Oregon state line north ofWinnemucca.
As new mines come on line, and existing facilities look to ramp up their product to capture higher prices, executives continue to bump against shortages of trained workers.
During 2004, the last year for which figures are available, the mining industry in Nevada added nearly 3,000 jobs growing to employment of 11,690 from 8,873 a year earlier and Fields says the pace appears to have continued this year.
But in many instances, Fields says, housing isn't available in rural Nevada even if companies manage to recruit skilled miners.
